The Huge Price For Gas Flaring

In March 2017, the Nigerian government, International Gas Union (IGU), the World Bank and Global Gas Flaring Reduction Partnership organized a seminar in Washington. The focus is on reducing gas flaring at oil production sites in Nigeria and unlocking Nigeria’s significant gas potential. The objectives of the seminar were to:

  • initiate consultation on a new National Gas Flare Commercialization Program;
  • build awareness about new small-scale technologies to use associated gas that is currently wastefully flared;
  • explore financing options for gas flare reduction and gas utilization; and
  • Share best practices for sustainable and inclusive access to energy

 

The meeting was within the prism that almost 8 billion cubic meters of gas are flared annually according to satellite data, and that Nigeria is the seventh-largest gas flare in the world. Between 2015 and 2016 Nigeria lost N523 billion to gas flaring as disclosed by the Department of Petroleum Resources (DPR). This was more than half of what was needed to finance the 2016 budget deficit put at N1.84 trillion.

For many stakeholders and Nigerians, a critical understanding of the huge costs of gas flaring to Nigerian taxpayers has not taken place. I figured out following the release of the monthly gas flare report yesterday, that it was high time we put forth information on this manifestation of government failure to the public. To critically understand the economic, governance, health and environmental costs of gas flaring within the Nigerian context, one must need to factor in the below analysis.

More than 75 million Nigerians lack access to electricity and in the case in which an individual has access, not many Nigerians have been able to enjoy at least 10 hours uninterrupted power supply daily. In a country with electricity generation just a little above 6000 megawatts, with a deficit of more than 94,500 megawatts and gas supply being a continuous challenge in power generation, it becomes clearer why this has remained a big controversial issue in oil and gas sector governance in Nigeria.

Between 1980 and 2011 Nigeria flared over 702, 208mmscfd   worth of gas according to sources from NNPC and DPR with gas flare rates as of 1980 put at 22904.0mmscfd.

In a monthly gas flare report released October 2017 by the NNPC, its group general manager public affairs division Mr. Ndu Ughamadu said that the gas flare rate for the month of August 2017 was 12.00 percent which translates to 919.73mmscfd compared to 10.03 percent for the preceding month of July 2017. The report gave an average gas flare rate of 10.15 percent, which is 734.56mmscfd, for the period August 2016 to August 2017.

At the rates of $0.93 to 1mmscfd, it means that Nigeria lost $85.5 million to gas flare in August 2017. It becomes easier at this point to calculate how much Nigeria has lost to gas flaring in the last 30 years vis-a-vis the lack of funds for critical development over these periods.

In the Niger Delta, flaring of associated gas contributes approximately 35 million metric tons of carbon dioxide (CO2) per year, methane (CH4), a large number of hydrocarbons and other forms of greenhouse gases (GHG) into the atmosphere. For example, methane constitutes approximately 86% of the natural gas, and because of the low burning efficiency of the flares, a greater percentage of the associated gas released is methane that has a higher global warming potential.

These emissions increase the concentration of greenhouse gases (GHG) in the atmosphere, which in turn contributes to global warming. Due to a large number of hydrocarbons in the Niger Delta atmosphere, there are large numbers of possible reactions in the photochemical smog in the region and emissions from flare and vent systems which have implicated regional and/or global environment for global warming.

The primary causes of acid rain are emissions of sulfur dioxide (SO2) and nitrogen oxides (NO) which combine with atmospheric moisture to form sulfuric acid and nitric acid respectively. However, corrugated roofs in the Delta region have been traced to acid rain.

Gas flaring aides’ acid rains and has over time acidified the soil, hence depleting soil nutrient in the Niger Delta. An array of health challenges such as cancer, neurological, reproductive and developmental effects, deformities in children, lung damage and skin problems has also been associated with gas flaring in the Niger Delta.

The Buhari administration has a roadmap to ending gas flaring by 2020 ahead of the target in the zero routine flaring by 2030 Initiative, a global effort to end routine flaring that Nigeria endorsed in 2016. The critical question remains whether this administration is actually committed to seeing to an end to gas flaring by 2020 especially in the face of a rise from 10.15 % flare rate in July to its current 12% rate.

It is fundamental to note, so much has been lost and is still being lost per second to gas flaring, and therefore the state must drastically work in addressing gas flaring, not only for revenue but also for human right and environmental issues.

Nwabueze Chibuzor